Gpm iii - planning

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2. DEFINITION (1)SELECTING MISSIONS AND OBJECTIVES AS WELLAS THE ACTIONS TO ACHIEVE THEM, WHICHREQUIRESDECISION MAKING, THAT ISCHOOSING A COURSE OF ACTION AMONGST ALLALTERNATIVES 3. DEFINITION (2)DECIDING IN ADVANCE ABOUT THE OBJECTIVES TOBE PURSUED BY THE ENTERPRISE; THE SELECTION OFBEST ALTERNATIVE COURSES OF ACTION TO REACHTHOSE OBJECTIVES AND A SPECIFICATION OFACTIVITIES TECHNICAL, FINANCIAL, PERSONNELETC. REQUIRED FOR THE IMPLEMENTATION OF PRE-SELECTED COURSES OF ACTION 4. Planning is an intellectually demanding process; itrequires the conscious determination of courses ofaction and the basing of decisions on purpose,knowledge, and considered estimates. - Koontz and ODonnell 5. Planning is the continuous process of making presententrepreneurial (risk taking) decisions systematicallyand with best possible knowledge of their futurity,organising systematically the efforts needed to carryout these decisions and measuring the results of thesedecisions against the expectations through organised,systematic feed-back- Peter F. Drucker 6. NATURE OF PLANNING Planning is goal-oriented Planning has a reference to future Primary function of management Planning involves choice It is an intellectual exercise Planning is all-pervasive 7. NATURE OF PLANNING Planning is both long range and short range Planning is continuous Planning is actionable Planning is flexible It is an integrated system Planning is efficient 8. IMPORTANCE OF PLANNING Effective performance understand - mission & objectives andthe methods of attaining Group effort effective know what they are to accomplish Basic management function (read slide 1) planning requires decision making provides arational approach Strongly implies managerial innovation Bridges the gap between where we are to where we want to go Plans furnish the standards of control 9. Close relationship of Planning andControlling NEWPLANS IMPLEMENTATION NOPLANNINGCONTROLLING OF PLANSUNDESIRA : COMPARINGBLEPLANS WITH DEVIATIONS FROMRESULTSPLANS UNDESIRABLEDEVIATIONCORRECTIVEACTION 10. TYPES OF PLANS MISSION OR PURPOSE OBJECTIVES OR GOALS STRATEGIES POLICIES PROCEDURE RULES PROGRAMS BUDGETS 11. TYPES OF PLANS MISSION OR PURPOSE:The basic purpose of function or tasks of an enterprise or agency or any part of it OBJECTIVES OR GOALS:The ends toward which activity is aimed STRATEGIES:Thedetermination of basic longterm objectives of an enterprise and the adoption of courses of action and allocation of resources necessary to achieve these goals 12. TYPES OF PLANS POLICIES:General statements or understandings that guide or channelize thinking in decision making PROCEDURES:Plans that establish a required method of handling future activities RULES:Spell out specific required actions or non actions, allowing no discretion 13. TYPES OF PLANS PROGRAMS:A complex of goals, policies, procedures, rules, task, assignments, steps, to be taken, resources to be employed, and other elements necessary to carry out a given course of action BUDGETS:A statement of expected results expressed in numerical terms. 14. STEPS IN PLANNING Being aware of opportunities Setting objectives or goals Considering planning premises Identifying alternatives Comparing alternatives in light of goals sought Choosing an alternative Formulating supporting plans Quantifying plans by making budgets 15. Be aware of opportunities In light of: The Market Competition What customers want Our weaknesses 16. Setting objectives or goalsWhere we want to be and what we want to accomplish and when 17. Considering planning premisesIn what environment internal or external will ourplans operate 18. Identifying alternativesWhat are the most promising alternatives in accomplishing our objectives? 19. Comparing alternatives in light ofgoals soughtWhich alternative will give us the best chance of meeting our goals at the lowest cost and highestprofit? 20. Choosing an alternativeSelecting the course of action we will pursue 21. Formulating supporting plansSuch as plans to: buy equipment Buy materials hire and train workers develop a new product 22. Quantifying plans by makingbudgetsDevelop such budgets as:Volume and price of salesOperating expenses necessary forplansExpenditures for capital equipment 23. PROCESS OF PLAN DEVELOPMENTBUILDINGDEVELOPMENT OF PLANSSECONDARY PREMISING FOUNDATIONFORECASTINGPRIMARY FOUNDATION 24. CONCEPT OF PLANNING PREMISES Key step in planning It refers to anticipated environment in which plans are expected to operate. It includes assumption or forecasts of the future and known conditions that will affect the operation of plans 25. CLASSIFICATION OF PLANNING PREMISES INTERNAL AND EXTERNAL PREMISES CONTROLLABLEAND UNCONTROLLABLE PREMISES QUANTITATIVE AND QUALITATIVE PREMISES 26. INTERNAL PREMISES They are relevant internal conditions of the enterprise on which plans will be based. Examples: Management strategies, policies and programmes Organisational structural flexibilities Manpower potential Availability of finances Approved sales forecast etc 27. EXTERNAL PREMISES Relevant external conditions on which plans will be based Example: Political conditions Social conditions Economic conditions Technological conditions Factors market conditions 28. CONTROLLABLE PREMISES Examples: Advertising programmes and policies Expansion programmes Policy of centralisation/decentralisation 29. UNCONTROLLABLE PREMISES Examples: Population growth Price trends Political environment Technological environment 30. SEMI-CONTROLLABLE PREMISES Examples: Labour turnover Labour efficiency Pricing policy 31. QUANTITATIVE PREMISES Expressed numerically; premises are tangible Examples: Finance availability Sales forecasts Population trends Price trends Plant capacity utilisation 32. QUALITATIVE PREMISES Cannot be expressed; intangible Examples: Human relations in the enterprise Morale of employees Prestige or reputation of the enterprise Political stability 33. ADVANTAGES OF PLANNING1.Helps in achieving objectives2.Better utilisation of resources3.Economy in operation4.Reduces uncertainty and risk5.Improves competitive strength6.Effective control7.Coordination8.Encourages motivation9.Guides in decision making10. Provides decentralization11. Improves efficiency12. Anticipation of crisis 34. LIMITATIONS OF PLANNING1. Lack of accurate information2. Time and cost3. Inflexibility4. Delay during emergency period5. False sense of security